Weak
June Tax Collections Leave State in the Red
North
Carolina collected a record $13.13 billion in tax
and non-tax revenue during the fiscal year that
ended June 30, an impressive figure but one that
was $142 million short of meeting the state's
revenue expectations for the year, according to
preliminary figures released to NCCBI by the
State Controller's Office. However, the state
Office of State Budget and Management was able to
move money around from other accounts in order to
end the year with a balanced budget.
The OSBM's Robert Powell told us that the state
will use appropriated but unspent money from
several state agencies -- called reversions -- to
make up the shortfall. "We do a monthly
analysis of revenues and we had been expected a
shortfall of around $90 million, so we had been
controlling expenditures to make sure we were
covered. Last week we realized (the shortfall)
would be around $140 million. It's not clear just
yet exactly where we will get the reversions
because the agencies haven't closed out their
budget years yet. But we're confident we'll find
the money needed to make sure we end the year
with a balanced budget."
He stressed that the shortfall was one that could
be handled administratively and would not require
any action by the General Assembly.
In the accompanying table, all figures are shown
net of transfers to other accounts, so the
numbers don't agree with the gross figures
reported elsewhere in this story. But the net
figures are interesting because it's on this
basis that the state manages its day-to-day
balance sheet. It's also enlightening because it
allows a comparison within individual line items
to year-ago figures. For instance, the table
shows that franchise taxes collected in the year
ended June 30 are more than $100 million below
the previous year's total.
The deficit surprised state officials who earlier
had expressed confidence that surging revenue
collections in May, which were $300 million over
budget, would continue into June, the final month
of the fiscal year. But June revenues were $115.6
million below target as almost all major tax
categories were weaker than expected.
For the year, individual income tax collections
at $7.08 billion were $41.3 million below target
and sales taxes, at $3.36 billion, were $18.3
million under budget. Non-tax revenues, a
category that includes interest on state
investments, court fees and other line items,
were $66 million below the $808 million expected.
One bright spot in the budget picture was
corporate income taxes, which amounted to $1.22
billion for the year, an increase of $89.1
million or 7.9 percent over the previous year's
$1.13 billion. The Controller's Office, which
reports corporate income taxes net of transfers
to other accounts, reported that corporate income
taxes were $74 million over the $903 million
expected for the year.
Compared with the previous fiscal year,
individual income taxes -- which account for more
than half of all state revenues -- were up $473.6
million or roughly 7 percent for the year.
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